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Chapter 7, Intersession

This document discusses establishing objectives and budgeting for promotional programs. It covers setting realistic and measurable advertising objectives that guide the program and can be used to evaluate success. Objectives should be specific, timebound, attainable, and measurable. Both sales and communication objectives are discussed. The document also covers factors that influence advertising budgets, such as marginal revenue and costs. Top-down and bottom-up budgeting approaches are mentioned. Finally, factors that can influence promotional budgets within an organization are outlined.

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Arju Lubna
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15 views12 pages

Chapter 7, Intersession

This document discusses establishing objectives and budgeting for promotional programs. It covers setting realistic and measurable advertising objectives that guide the program and can be used to evaluate success. Objectives should be specific, timebound, attainable, and measurable. Both sales and communication objectives are discussed. The document also covers factors that influence advertising budgets, such as marginal revenue and costs. Top-down and bottom-up budgeting approaches are mentioned. Finally, factors that can influence promotional budgets within an organization are outlined.

Uploaded by

Arju Lubna
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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CHAPTER 7

ESTABLISHING
OBJECTIVES & BUDGETING
FOR THE PROMOTIONAL
PROGRAM
Setting Advertising Objectives

SET REALISTIC OBJECTIVE THAT WILL


GUIDE THE ADVERTISING AND
PROMOTIONAL PROGRAM
Value of Objectives

Why you need to have an advertising objective?


Measurement/Evaluation (Obj
Provides A Benchmark To Evaluate
Success & Falure Of Promo Campaign)

Planning & Decision Making ( specific


promo obj guides to develop IMC plan and to
make decisions)
Communications (ad & promotional program
must be coordinated within the company)
Characteristics of Objectives

Timebound

Attainable Specific

Measurable
Realistic
Sales vs. Communication Objective
Sales Communications
Objectives Objectives

• Primary goal is • Increased brand


increased sales knowledge, interest,
• Requires economic favorable attitudes
justification and image
• Should produce • Immediate response
quantifiable results not expected
• Sales volume, • Goal is creating
market share, profits, favorable
ROI predispositions
Communication Objective

Conative (behavioral) Purchase


Ads stimulate or
direct desires Purchase intentions
Affective (feeling)
Ads change attitudes and Favorable attitudes and
feelings image

Cognitive (thinking)
Ads provide Brand knowledge
information and facts and interest
Brand awareness
5% Use

e
tiv
na
Co
20% Trial
Communication Effects
25% Preference

e
tiv
Pyramid

f ec
Af
40% Liking
ve

70% Knowledge/comprehension
it i
gn
Co

90% Awareness
Benchmark
measures (know
the present status of
target audience-
awareness,
knowledge, intention)
Characteristics of
Well defined
Objectives audience
(specify in terms Specified
of geography, time period
demography, Concrete
psychographic) (describe the
basic msg. be
specific and
clear)
measurable
task
Balancing Objectives & Budgets

How much
company is willing
to spend

What the company


needs to achieve
Increase the advertising spending
if the cost of advertising is LESS than the
marginal revenue

Keep the ad spending


Budget amount if the cost of advertising is
EQUAL to marginal revenue

Adjustments

Decrease ad spending
If the cost of ad is MORE
than the marginal revenue
Top-Down vs. Bottom-Up Budgeting
Factors that influence advertising and promotion
budgets

• The organization’s structure


• Power and politics
• The use of expert opinions
• Characteristics of the decision maker
• Approval and negotiation channels
• Pressure on senior managers to arrive
at the optimal budget

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